A group of investors led by Macy’s Inc.’s second-largest shareholder are exploring a potential takeover offer that could value the struggling department store chain at $5.8 billion, including debt..
The group, which includes hedge fund Starboard Value LP, is working with financial advisors to prepare a bid that would take Macy’s private, according to people familiar with the matter. The investors are said to be considering offering around $19 per share, a premium of about 15% to Macy’s closing price on Friday..
Macy’s shares surged as much as 11% in premarket trading on Monday following the news. The stock, which has lost nearly half of its value in the past year, closed at $16.49 on Friday..
The potential offer comes as Macy’s is grappling with declining sales and a changing retail landscape. The company has been closing stores and cutting jobs in an effort to stem its losses. In February, Macy’s reported a 3.4% decline in comparable sales for the holiday quarter, its eighth consecutive quarter of negative same-store sales..
Macy’s has been the subject of takeover speculation for several months. In January, activist investor Carl Icahn disclosed a stake of more than 1% in the company and called for changes to its board and management. Icahn has since sold his stake in Macy’s..
Starboard Value is a New York-based hedge fund that has a history of investing in distressed companies. The firm is known for its aggressive approach to activism, often pushing for changes in management and strategy..
If Starboard Value’s bid for Macy’s is successful, it would be the latest in a series of retail takeovers. In recent years, private equity firms have snapped up a number of struggling retailers, including Toys ‘R’ Us, Payless ShoeSource, and Gymboree..
It is unclear how Macy’s management will respond to the potential takeover offer. The company has not yet commented on the matter..
A successful takeover of Macy’s would be a major coup for Starboard Value. The hedge fund would gain control of one of the most iconic department store chains in the United States. However, Macy’s is also a complex and challenging business, and it remains to be seen whether Starboard Value can turn the company around..
